A "truck loan" is a general term covering several finance structures, while a "chattel mortgage" is a specific one of those structures where your business owns the truck outright from settlement and the lender secures a mortgage over the asset. Understanding how a chattel mortgage compares to other truck loan options helps you choose the structure that best suits your tax position, cash flow and ownership goals.
What Each Term Actually Means
"Truck loan" is a general label for any finance product used to buy a truck or trailer, while "chattel mortgage" is one specific type of truck loan. Under a chattel mortgage, the lender advances funds so your business owns the vehicle outright from settlement, and the lender takes a registered mortgage (a charge) over the asset as security until the loan is repaid. Other truck loan structures include finance leases, hire purchase and novated arrangements, so a chattel mortgage sits inside the broader truck loan category rather than being a competing product.
Who Owns The Truck
The clearest practical difference is ownership. With a chattel mortgage, your business is the registered owner and can hold the asset on its balance sheet from day one, even though the lender holds security over it. With some other truck loan structures, such as a finance lease, the financier retains ownership for the term and you effectively pay to use the asset, with an option to purchase at the end. If holding the asset on your books matters for depreciation or asset-backed borrowing capacity, that distinction is worth understanding before you sign.
GST And Tax Treatment
A chattel mortgage generally allows a GST-registered business to claim the GST credit on the purchase price upfront, subject to how the truck is used in the business, and interest and depreciation may be claimed as running costs over the loan term. Lease-style truck loans are typically treated differently, with repayments claimed as a business expense rather than through depreciation. Every business's tax position differs, so these are general observations only and it is worth checking treatment with your accountant against your own circumstances.
Flexibility On Deposits And Balloons
Chattel mortgages are commonly structured with a range of deposit options, including no-deposit or up to 100% finance for eligible applicants, and an optional balloon or residual payment at the end of the term to reduce monthly repayments. Terms typically run from one to seven years, and loan amounts can range from around $20,000 for a single trailer up to $10 million or more for a fleet. Other truck loan types may have different rules around residuals and end-of-term ownership, so the right structure often comes down to how you want repayments and cash flow to work.
Which Suits Your Business
If you want to own the asset immediately, maximise depreciation benefits, and keep flexibility around deposits and balloon payments, a chattel mortgage is usually the more straightforward choice for an ABN holder buying a prime mover, tipper or trailer for business use. If your priority is lower reported liabilities or you expect to upgrade equipment frequently, another truck loan structure may suit better. Because eligibility, rates and features vary by lender, the best fit depends on your credit profile, deposit and how the truck will be used, which is where comparing options across lenders adds real value.
Get An Obligation-Free Quote
Overdrive Truck Finance compares 80+ banks and non-bank lenders to match you with the right structure, whether that is a chattel mortgage or another truck loan option, with rates from 6.55% p.a. (higher-risk profiles may see rates up to around 15% p.a., indicative only and subject to lender criteria, credit assessment, fees, terms and approval), low/lite/no-doc options up to $500,000 and full-doc finance up to $10 million or more. Same-day pre-approval and approval within 24 to 48 hours may be available on eligible applications, subject to approval. Get in touch for an obligation-free quote, our initial enquiry is a soft credit check only and won't affect your credit score.
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